Back

Country Reports

Liechtenstein Country Report

Content provided by
IHS Markit Logo

Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

Liechtenstein is a politically stable micro-state that is currently led by a centre-right coalition government. The country is a hereditary constitutional monarchy and the royal family has a comparatively high impact on policy-making. Although not a member of the European Union, Liechtenstein maintains close ties with the bloc. The principality’s closest diplomatic partner is Switzerland, with which it also shares a currency. Liechtenstein is a member of the European Economic Area (EEA) and the World Trade Organization (WTO). Liechtenstein’s favourable business environment is heavily focused on financial services and banking. Inter-state war risks and terrorism risks are minimal owing to Liechtenstein’s size, its lack of armed forces, and its friendly relations with all of its neighbouring countries and the European Union as a whole.GDP will contract strongly by around 7.5% in 2020, compared with a 3.2% average growth rate during 1985–2018 (Liechtenstein GDP data are only available annually with a 13-month delay). This owes to the ramifications of the coronavirus disease 2019 (COVID-19) virus outbreak, which has hit an economy that was already vulnerable because of the relative weakness of domestic demand during 2018–19. The latter is linked at least in part to private consumption being hurt by Swiss franc appreciation, which has made shopping abroad in nearby Austria or Germany increasingly attractive.As Liechtenstein does not have a central bank, currency, or inflation measurement of its own, instead sharing these with Switzerland, the country tracks the latter’s ultra-expansive monetary policy aimed at limiting Swiss franc appreciation. The franc will remain strong in 2020, however, owing to high uncertainty levels related to geopolitics, Brexit, and the COVID-19 crisis, which persistently highlight the currency’s safe-haven property. As inflation will be negative in 2020 and probably stay well below the Swiss National Bank’s 2% target in the coming years, monetary policy tightening is most unlikely before 2024.
Last update: September 10, 2020

Operational Outlook

Liechtenstein is usually a favourable business and investment destination, but there is currently a heightened risk of disruption caused by the coronavirus disease 2019 (COVID-19) virus outbreak across Europe and related emergency measures. Overall, the small, landlocked country benefits from well-connected infrastructure and transport links to neighbouring Austria and Switzerland. Industrial action is likely to remain rare and the labour force is generally highly educated and multilingual. For investors, low taxes on commercially active companies are as much a draw for manufacturing and research and development-oriented investment as the total tax exemption is for holding companies.

Last update: September 10, 2020

Terrorism

Low

The risk of terrorist attacks is likely to remain very low as a result of Liechtenstein's policy of neutrality and the country's minimal impact on international relations as well as conflicts. Despite Liechtenstein's collaboration with neighbouring countries on security issues, the country is unlikely to become a major target for international terrorist groups. There are no domestic terrorist groups operating in the micro-state.

Last update: September 10, 2020

Crime

Crime levels in Liechtenstein are likely to remain very low. The small country is not directly affected by terrorism but works closely with fellow Schengen countries to limit the room for manoeuvre for militant organisations operating in Europe. Drug dealing and other offences are rarely reported, while organised crime groups mostly use the country to deposit funds. Liechtenstein has taken steps to shed its international image as a haven for criminal funds. As a member of the European Economic Area (EEA), it is subject to the European Union's laws on countering terrorism financing and money laundering.

Last update: September 10, 2020

War Risks

Inter-state war risks in Liechtenstein will remain negligible as the country is neutral and maintains friendly relationships with Switzerland, Austria, and Germany. Due to its small size and the lack of armed forces, Liechtenstein is not involved in any international military missions. The country collaborates closely with Switzerland on national security issues.

Last update: September 10, 2020

Social Stability

Low

Liechtenstein is an internally stable micro-state and risks of civil unrest are likely to remain very low. There is a low risk of protests, while disruption through industrial action also happens only on rare occasions.

Last update: September 10, 2020

Health Risk

Low

Vaccinations required to enter the country

No vaccinations are required to enter the country.

Routine Vaccinations

Diphtheria-Tetanus-Polio: A booster shot should be administered if necessary (once every ten years).

Other Vaccinations

Tick-Borne Encephalitis: For stays in rural zones and for hiking enthusiasts (for children over the age of one).

For Children: All standard childhood immunizations should be up-to-date. In the case of a long stay, the BCG vaccine is recommended for children over one month and the MMR (measles-mumps-rubella) vaccine for children over nine months.

Last update: April 5, 2019

Practical Information

Climate

Liechtenstein has a mild mountainous climate. Summers are hot (20°C to 28°C) and humid while winters are cold and snowy. Temperatures rarely fall below -15°C. The Foehn, a hot and dry wind, tempers the climate, particularly in the spring (April to June) and autumn (September to October) months.

Useful Numbers

Country Code: +423
Police: 117
Ambulance: 144

Electricity

Voltage: 230 V ~ 50 Hz

Outlets:

Last update: April 5, 2019